The Consumer Protection Act (CPA) will unleash a litany of woes for buy-to-let investors and rental managing agents if it is implemented in its entirety on 25 October.
The first increment took effect on 25 April 2010.
The Act imposes onerous constraints on landlords whilst empowering defaulting tenants and even threatens the democratic right of investors to charge a market-related rental.
Marlon Shevelew of Marlon Shevelew & Associates, legal adviser to Tenant Profile Network (TPN), said at a TPN seminar on the CPA on Wednesday that if the CPA is accepted in its current form, the onus will fall squarely on landlords to prove that they are not discriminating against anyone – even someone who can’t pay the required rental amount.
“The Act specifically targets unfair discrimination and further enforces the right of equality in the consumer market. If the Act is accepted and enacted, there will be a total shift of the onus to the landlord to prove that he is not discriminating in any way against a tenant on the basis of things like race, gender, nationality, and even income, which means a tenant without the ability to pay cannot be discriminated against.”
Shevelew says the second constraint imposed on landlords will be in terms of marketing his/her property. “Under the CPA, the consumer has an unbridled right to privacy and direct marketing will become very difficult. The landlords’ ability to survive will be severely curtailed as it will be virtually impossible to source potential clients through ads.
“Another detrimental marketing factor for landlords in the CPA is that exaggeration or other sales pitches will henceforth longer be illegal. A property can no longer be marketed with adjectives and phrases like ‘fantastic’, ‘close to amenities’ or ‘spacious’.”
But two of the most controversial aspects of the CPA relate to the cancellation and renewal of leases. “The automatic renewal of leases after a fixed period will be a thing of the past if the CPA goes through. Tenants will also have the power to cancel leases at any time before the contract expires as long as they give 20 business days’ notice, after which rental of property becomes the owner’s problem and the tenant cannot be held liable for losses incurred.”
He says this requirement is subject to a “reasonable” cancellation penalty.
“There is no mention made in the CPA of what ‘reasonable’ actually means and this is very problematic for landlords. A rental contract will not be worth the paper it’s written on.”
He says the landlord will also be saddled with the responsibility to contact the tenant between 40 and 80 days before the contract expires to determine whether the tenant wants to renew the lease or cancel it. “If this clause is not meticulously complied with, the tenant can merely stay on and doesn’t even have to cancel in writing. The tenant can also refuse to leave the property because of a non-descript aspect of the description of the property in the lease notice he is not happy with.”
He says the Act also includes the right to fair and honest dealings. “No physical force, coercion, undue influence, pressure, duress or harassment may be employed to evict a tenant or compel them to sign a lease. Some of these requirements are fair, but elements like ‘undue influence’ or ‘pressure’ are very open ended and vague and will take further power away from landlords to evict rogue tenants.” – Eugene Brink
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This is ridiculous!
Discrimination against property owners! – Derek Odendaal
The aspect of the CPA is good in its elementary form. However when the government begins to socialize the economy through legislation, such as the CPA in its current form, then the democratic rights of individuals is slowly been eroded away into a draconian society.
Why would people buy houses as an investment to prop up their retirement funds, under this legislation. Certainly this legislation would rather encourage disinvestment, not only in the property market, but generally. The government should rather concentrate, on promoting legislation that promotes investment, as it is also not only whites who invest in this country and there future.
It seems that slowly all our rights are being removed. – David. J. Griessel
This is horrendous!!
This is going to be so unfair. Landlords are already battling to get rid of defaulting tenants even though many of them have properly signed leases or trustworthy agents!! They are the ones losing thousands and thousands on unpaid rents, municipal bills as well as lawyer costs. This can ruin a landlord who rents out a property for extra income!!
What is even worse is that by the time one has managed to get rid of the tenant via the required procedure, one has often lost such a huge amount of money and the defaulting tenant walks away scotfree with a clean record to the next unsuspecting landlord as it needs another courtcase and some more money to prosecute him!
What is happening with the laws in this country?. It is becoming a total mockery!! – Gwynned Muller
I write in my private capacity.
As both a lawyer and a “landlord” I am disdained by this cynical and one sided article. I expect better from what you choose to put on your site. – Mlungisi Mahlangu
As huurder verwelkom ek hierdie stap van CPA. Dit sal ook goed wees as daar wetgewing kom teen trustees wat hulself en hul vriende vrystel van die nakoming van die sg. Huisreels, terwyl die huurders stink briewe kry vir geringe onwetende (bv 'n agent wat geweet het die eienaar het 'n kat, maar net aangeneem het as daar honde in elke 2e erf is en een kat wat homself sit en was - logiese aanname - alle diere welkom is en nie SEKER gemaak het dat katte spesifiek welkom is nie) oortredings wat hulle as misdadigers voorstel; die uittart/treitering/wat mens dit ookal noem van huurders deur eienaars om watter rede ookal. – Anoniem
I have an issue. A close and personal friend has leased his residential premises to me . it was a verbal arrangement for a 3 year period – max 5 years with an option to buy at the end of the 3rd year . (this done due to the current markets downward trend on property prices and he did not mind waiting).
Based on this agreement and with his consent, I will be allowed to do any improvements to the property. Should I decide to vacate , he would compensate me for the improvements. I had given him a 2 month rent deposit and the month deposit that I paid was deemed for the following month as I took occupation only at the end of the month.
Early this year I had a problem with finances and he had given me a grace period until I am back on my feet.
Unfortunately, he passed on.
An executor was appointed and ruthlessly acted to evict me and issued summons as well for the outstanding rent. The amount differs to what I have calculated.
What are my rights as he has turned around saying that I only had a 10 month lease and since I am in default, the lease is forthwith terminated.
He has secured a tenant at R2000 higher than what I paid. This was done prior to the summons being served and they are using violent means to ‘throw me out’ of the premises. – Ahmed
Very scary changes in legislation! – Malcolm Gibbens
If that's the case, then why rent? Might as well leave the keys to the property in the door and let the it be a first come first serve. The less you can afford the better your chance of renting. Pity I can't do this with my bond! – Anonymous
Thank you for the update.
Surely the Estate Agency Board must draw up a lease regards "CPA will injure Landlords" for the Estate Agents.
If not where will agents be able to get access of a copy of the Lease Agreement.– Menants
I am currently residing in Gauteng, Lenasia i have just moved into a new flat currently renting , i was given a contract to sign , but was not keen on signing as to the clause stated within e.g my notice period on vacating the premises has to be a two (2) months notice period which i think is unfair because if i have to find a new place that would be much cheaper no other landlord is going to wait for me thus that puts me in a problem, my other issue is that the flats in Lenasia are so old and yet the rental is over priced and escalates
With a 10% increase yearly is this fair?
I personally think that the CPA should actually send out someone to
Review all the Landlords in Lenasia , as these landlords are ripping us off. – Sanjeev
I cannot believe that a landlord can be treated this way. We hear of many cases of tenants abusing or being destructive in their “units” and with this new act they can get away with blue murder!
I suppose the only way one get evict rogue tenants then is to sell up and ship your belongings to Perth?
The mind boggles at some of the acts being promogulated – no one benefits except unscrupulous tenants and not even a written and signed contract allows for a landlord his rights. – Ray
We might as well let them all have free rent now, and close down as a rental company and owner might as well stop purchasing property, tenants have enough right now and have more tricks up their sleeves than a barrel full of monkeys. – Mike Thorne
This will prompt the landlords to either sell or give tenants notice to avoid problems. The tenants who cannot afford to buy, will be left on the street. – David Smith
I agree with the comments of Mlungisi Mahlangu.
It is time for publishing houses to either tell the full story (without making assumptions) otherwise to rather shut-up as you simply then classify yourself as part of the group of people in this country who likes to course emotional tension.
I am a landlord, and I am astound by stories I here about landlords 'milking the cow': Some landlords charge their tenants the property levies on top of monthly rent.
Crazy 'CONTRACT FEES' are sometimes added to the burden of the applicant tenant.
With respect to rental increases. HOW can you increase rent with 10% yearly...yes it is an investment, but as a human being I am not going to slaughter a cow just for my own gain...it is a two-sided relationship, with emphasis in 'relationship'...something that a lot of landlords don’t understand AT ALL.
Landlords...something like the CPA is being applied to you because of your OWN wrong doing. - Anonymous100
Sadly we have legislators with no foresight whatsoever, who implement laws that are so prejudicial to one party that they eventually backfire and have the opposite effect to what was intended.
As a home owner, if I don’t pay my electricity account, Eskom cuts my electricity because I have breached the terms of my contract with them. But – as a tenant I don’t have to pay a cent, and if the electricity is cut off – I can complain that my human rights have been infringed – and accuse the landlord of human rights abuse and demand that the electricity be reinstated immediately – all with the backing of human rights groups, legal clinics and the justice system.
A lease agreement was rendered pointless by the PIE Act which grants the tenant absolute protection, at the expense of the landlord. The tenant can breach each and every clause in the contract – but the landlord cannot evict them without having to institute legal action. Not only is this extremely expensive, but causes extended delays whilst waiting for a judgement – and all the while the tenant lives at the landlord’s expense.
Is there any wonder that the buy to let percentage has dropped from 25% to 7%?
Instead of protecting tenants, this new Consumer Protection Act will eventually lead to property owners selling their rental properties rather than be subject to a situation where the tenant has all the rights, and they have none.
With no privately owned properties available for rental, the onus to provide rental accommodation will fall totally on the municipal, provincial and national government …..
So good luck to you future tenants! – Anonymous
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